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CNA Financial, ranked as the seventh-largest commercial insurer in the United States, has excluded coverage for nonfungible tokens (NFTs) from Schwab Strategic Trust’s policy valued at $20 million.
In a submission to the US Securities and Exchange Commission (SEC), the insurer included an exclusion in the document, stating that the bond does not cover any “loss, damage, claim, occurrence, or suit related to NFTs.” The filing described NFTs as:
“Any unique digital identifier linked to any digital ledger technology which may be utilized to verify authenticity or ownership of anything, including but not limited to any digital, tangible, or intangible item, but cannot be substituted or exchanged for any similar item.”
With this section added to the policy, any losses associated with NFTs will not be compensated by the insurer. Nevertheless, while NFTs are excluded from the policy, the document also specified that “cryptocurrency” is not encompassed in its definition of NFTs.
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NFTs surged in popularity during the bull market of 2021, with numerous celebrities and companies engaging in the trend. However, a few years later, NFTs experienced a significant decline in both their prices and trading volume. On Aug. 3, NFTs indicated a decrease in gas usage, reflecting a change in the market dynamics.
Related: NFT-styled debit cards the future of Web3 — Animoca founder on $30M Hi investment
Despite the waning interest in NFTs, certain celebrities and businesses continue to invest in them. On Sept. 4, soccer player Cristiano Ronaldo announced his intention to release additional NFTs in the future while undergoing a lie detector test. This test was conducted to commemorate the launch of his second NFT collection in collaboration with crypto exchange Binance.
In addition to Ronaldo, an airline has recently integrated NFTs into its loyalty program. On Aug. 31, Lufthansa introduced an NFT app that enables users to scan their boarding passes to obtain NFTs. Once collected, these NFTs can qualify passengers for rewards such as flight upgrades or lounge access.
Magazine: NFT collapse and monster egos feature in new Murakami exhibition
